GBP/USD Forecast Oct. 7-Oct. 11 – Anxious markets await British GDP, Manufacturing Manufacturing

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    GBP/USD rebounded final week and pushed above the 1.23 line. This week’s key occasions embrace month-to-month GDP and manufacturing manufacturing. Right here is an outlook for the highlights of the upcoming week and an up to date technical evaluation for GBP/USD.

    The pound managed to publish positive aspects regardless of gloomy British indicators. British GDP declined by zero.2% within the second quarter, marking the primary time the financial system has contracted since 2013. Manufacturing PMI improved to 48.three, however this marked a fifth straight month beneath the 50-level, which signifies contraction. Development PMI slowed to 43.three, down from 45.zero a month earlier.

    U.S. numbers proceed to level to a slowdown within the financial system. The ISM Manufacturing PMI for September pointed to contraction for a second straight month. The Providers PMI pointed to enlargement, however slipped to 52.6, its lowest studying since August 2016. Employment information additionally disillusioned. Nonfarm payrolls got here in at 136 thousand, shy of the forecast of 145 thousand. Wage progress fell to zero.zero%, down from zero.four% a month earlier. The unemployment price fell to three.5%, its lowest price since 1969.

    GBP/USD each day graph with resistance and assist strains on it. Click on to enlarge:

    Halifax HPI: Monday, 7:30. The housing inflation indicator posted a acquire of zero.three% in August after back-to-back declines. One other acquire is projected for September, with an estimate of zero.four%.
    BRC Retail Gross sales Monitor: Tuesday, 23:01. This launch is a helpful gauge of client spending. The indicator has posted three declines up to now 4 months, and a decline of zero.eight% is forecast for September.
    GDP: Thursday, eight:30. GDP is among the most essential indicators and needs to be thought of a market-mover. The month-to-month indicator confirmed that the financial system grew zero.three% in July, above the estimate of zero.1%. Nonetheless, the markets are braced for a flat studying of zero.zero% in August.
    Manufacturing Manufacturing: Thursday, eight:30. This key manufacturing indicator rebounded in July with a acquire of zero.three%, above expectations. The markets predict a weak acquire of zero.1% in August.

    GBP/USD Technical evaluation

    Technical strains from prime to backside:

    We start with resistance at 1.2616. This line has supplied resistance since early July. 1.2535 is subsequent.

    1.2420 (talked about final week) was below stress late final week.

    1.2330 was related in the course of the week and the pair is at present trading at this line.

    The spherical variety of 1.22 is the primary assist stage. It was an essential assist stage in December 2016.

    1.2080 is defending the symbolic 1.20 stage.

    1.1944 is the ultimate assist line for now.

    I stay bearish on GBP/USD

    The U.Ok. is scheduled to depart the EU later this month and London and Brussels nonetheless far aside on a withdrawal settlement. Which means that the U.Ok might go away and not using a deal in place, which might be detrimental to the financial system and will ship the pound sharply decrease.

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